This years major accomplishments are in the following areas: 1)Sonic hedgehog from the auditory ganglion regulates the length of the cochlear duct and the timing of hair cell differentiation (manuscript in preparation) The mammalian hearing apparatus, the organ of corti, is tonotopically organized. An interesting feature of the organ of Corti formation is that cell cycle exit of sensory hair cells is initiated at the apex of the cochlear duct and proceeds towards the base. In contrast, hair cell differentiation starts from the base and progresses towards the apex after cell cycle exit is completed. Thus, sensory hair cell differentiation in the apical cochlear duct is normally delayed after terminal mitosis, relative to the base. This unconventional cellular development may provide some of the anatomical bases for cochlear tonotopy. Based on expression studies, it has been proposed that Sonic hedgehog (Shh) expressed in the auditory ganglion plays a role in delaying the differentiation of post-mitotic hair cell in the apex. Our results of targeted deletion of Shh in the auditory ganglion indicated that the cochlear duct of conditional mutants is shorter and it shows a premature expression of Atoh1 in the organ of Corti. While the negative regulation of Atoh1 by Shh supports the notion that Shh is involved in the timing of hair cell differentiation, the progression of differentiation is similar between wildtype and mutant cochlea, suggesting other factors are responsible for the selective delay of hair cell differentiation in the apex of the cochlear duct. 2)Genetic interaction of Lmx1a and Lmo4 in patterning the vestibular system (manuscript in preparation) LIM-homeodomain (LIM-HD) transcription factors are critical for formation of multiple organs. In Drosophila, the activities of LIM-HD are regulated by a family of LIM-only domain proteins, which compete with LIM-HD for their binding partners and thereby down-regulating LIM-HD activated transcription. Lmx1a is a member of the LIM-HD transcription factors, which is important for inner ear formation. In dreher mutants, in which a point mutation in Lmx1a created a functional null allele, the inner ear does not form properly but all the sensory patches are present within the membranous epithelium. In contrast, Lmo4, one of the LIM-only proteins expressed in the developing inner ear, is required for the formation of the three sensory organs, cristae. We demonstrated that Lmx1a and Lmo4 genetically interact with each other. The absence of crista formation in Lmo4 null mutants is partially or fully rescued in the genetic background of one or both alleles of dreher, respectively. Based on these results, we propose that Lmx1a activities in the prospective cristae are normally negatively regulated by Lmo4 in order for sensory tissue development to proceed. 3)Requirement of Ephrinb2 in ear development The Eph family of receptor tyrosine kinases and their cell surface-bound ephrin ligands are implicated in a wide range of developmental, physiological, and pathological processes in many cell types and organs. Despite efforts begun over a decade ago to elucidate the expression patterns of these important signaling molecules in the auditory and vestibular systems, knowledge of their functional significance in hearing and balance remains rudimentary. We investigated the effects of ephrinb2 (efnb2) loss-of-function on the murine ear using Cre-LoxP technology, as efnb2 null homozygosity results in early embryonic death. Using multiple Cre drivers with activities in different tissues of the developing ear, we have defined a spectrum of abnormalities remarkably similar to that of the human Mondini dysplasia or EVA (enlarged endolymphatic duct, cochlear hypoplasia, and variably penetrant stapes fixation to the otic capsule). More specifically, we have identified a distended endolymphatic duct and otoconial abnormalities as resulting from a loss of otic epithelial (rather than mesenchymal) efnb2. Loss of otic epithelial efnb2 also causes dysregulation of the pendrin (SLC26A4) gene, which encodes a transporter required for proper inner ear fluid homeostasis in humans. 4)Anterior and posterior polarity of the inner ear is established by retinoic acid signaling (manuscript published) Retinoic acid (RA) is an important morphogen during embryogenesis. Using gain- and loss- of function approaches in chicken and mice, we show that RA signaling at a distance establishes the anterior-posterior axis of the inner ear. A higher level of RA signaling within the otic epithelium is required to pattern the posterior, non-sensory fates via upregulation of the gene Tbx1, whereas the anterior otic region requires relatively lower levels of RA signaling than the posterior for establishing the neural-sensory fates.